An Application of ANP with Benefits, Opportunities, Costs and Risks in Supplier Selection: A Case Study in a Diesel Engine Manufacturing Firm

Supplier selection problem, considered as a multi-criteria decision-making (MCDM) problem, is one of the most important issues for firms. Lots of literatures about it have been emitted since 1960s. However, the criteria used by most of them are independent, which usually does not correspond with the real world. From the perspective of reducing this shortcoming, this paper develops a model by using analytic network process (ANP), an extension of analytic hierarchy process (AHP), which incorporates the relationship of interdependence and feedback in a multilevel decision network, the criteria included in this model are categorized in four control hierarchies, that is, benefits, opportunities, costs and risks (BOCR). The proposed model is then implemented in a diesel engine manufacturing firm.